Breaking the Bond: The Effect of Banker Turnover on Municipal Bonds

Presentations: Olin Finance Conference at WashU Poster Session, FMA 2025 Doctoral Symposium, AFA PhD Poster Session 2026 (scheduled)  

Abstract: Does human capital affect outcomes in municipal bond underwriting? I assemble novel data on senior banker movements in public finance and study whether municipal borrowers benefit from following their banker when the banker moves to a new bank. I exploit a quasi-exogenous shock, the 2021 Texas underwriter ban that forced several major banks to exit municipal underwriting. Many bankers moved as a result, and some borrowers were induced to follow their banker. This design isolates the effect of following for borrowers whose decision was driven by the ban. I find that following a banker reduces yield spreads by 36 basis points. The benefit is stronger for unrated borrowers and for deals led by bankers who have MBA degrees. Consistent with an investor-network channel, investors direct new investments towards the banker’s new bank. My findings highlight how relationship-specific human capital materially influences borrowing costs in the municipal bond market.

The Role of Underwriters in the Green Bond Market

Presentations: American Finance Association (AFA) PhD Poster Session 2024 

Abstract: This paper examines the role of underwriters in certifying the environmental quality of green bonds. I find that firms with long-standing relationships with major green underwriters are 1.5–2 times more likely to issue green bonds and obtain a green premium of up to 29 basis points. However, despite these financial benefits, these firms increase their emission intensity by approximately 25% after green bond issuance. In contrast, unrelated issuers, those without prior ties to major green underwriters, receive no financial premium but significantly reduce emissions. These results suggest that major green underwriters prioritize established client relationships over rigorous environmental screening, thereby facilitating greenwashing.

Green Bonds: Bridging Managerial Incentives

and Environmental Goals (with Filipp Prokopev)

Abstract: This paper explores whether green bond contracts can effectively incentivize managers to improve environmental performance. We develop a theoretical model in which a firm issues both green and conventional bonds, and investors with green preferences acquire information about the firm’s environmental outcomes. This targeted monitoring enhances managerial oversight. We show that when managerial compensation is linked to green bond performance, a feedback loop emerges: managers, anticipating investor scrutiny, increase their effort, leading to superior environmental results. The model highlights how green bond contract design, combined with investor preferences, can create endogenous incentives for credible environmental improvement.